German Proves to Be a Man of Many Car Parts; under Pressure from Management and Struggling Automotive Sector Dr Thomas Borghoff PROFILE

Article excerpt

A pounds 10 million production plant opened at Witton by VDO UK is what can happen when a management is told to improve its operation or face plant closure.

A warning like that can make nerves jangle, but it does help if behind the threat is Mannesmann - one of Germany's top ten companies.

The help factor is being able to draw on 44 development and production locations Mannesmann VDO boasts in 19 countries.

VDO's plants are in countries wherever vehicles are built, and its speciality in the automotive industry is developing motor vehicle systems technology.

Owners of the new Rover 75 are confronted with products from Witton site when they look at the instrument panel, analogue clock, radio, and electronic navigation system.

Beneath the bonnet, the company is also producing the fuel sender and screen wash system.

In 1993, the Birmingham operation had "dire problems" and a German managing director, Mr Gerhard Rupp, was brought in to save the plant and the jobs that went with it.

Two months ago Mr Rupp retired, but his turnaround team - which included his deputy Dr Thomas Borghoff, aged 32 - had risen to the challenge.

It had established its manufacturing operation in Birmingham in 1987.

Starting with one plant on the Holford Estate, VDO UK quickly had to increase capacity and acquire two further sites for production. One was established nearby on the same estate and the other one in 1996 at Saltley.

The company had been under pressure on two fronts, from its German management who had given it an ultimatum, and the struggling automotive sector in which it was trying to survive.

Dr Borghoff was promoted to operations manager in 1994, and in January this year was made deputy managing director. In May he became managing director.

Sitting in his office at the new VDO UK building at Holford, Dr Borghoff looked back at the six years which had seen meltdown, optimism and hard-won survival.

"We had been told we were looking at potential closure unless the situation improved, and improved drastically.

"In those days VDO UK was half the size it is now, and the turnover was about pounds 20 million," he said.

In 1993-94, financial troubles started for the company and the situation became intolerable.

Rather than continue with the losses, the top management in Germany had decided that without an improvement it was easier to close down the operation. Dr Borghoff had just completed his PhD in business administration and his MSc in electrical engineering in Germany when he was made a member of the turnaround team that would try to save the firm.

His academic ability was soon put to the test in an assembly-based company and he was put in charge of logistics management. That meant purchasing, procurement and supply quality assurances for the products.

"Regardless of the PhD and MSc, it was a wonderful opportunity and it took a year to sort out the initial problems in the department for which I was responsible," he said.

He became operations manager and was responsible for all day-to-day functions of the factory which included logistics, production engineering, quality and manufacturing.

He was in charge of 100 staff and he remained in the position for four years.

Dr Borghoff said: "We must have been successful in what was achieved.

"Today our order book is full to the extent that we shall treble our sales from pounds 40 million to pounds 120 million over the next three years.

"We have a very strong market penetration in Germany and some other European countries.

"However, in the UK our market share is still very small in comparison. This, of course, offers a lot of scope for further growth in the UK.

"Our business potential is enormous in the field of instrumentation, fuel sender and sensor technology, as well as for fully integrated cockpit assemblies. …